Construction Insurance

Construction insurance is a broad category of insurance policies that provide protection during construction projects. The owner and general contractor will want to insure the project against the risk of physical loss or damage during construction. “Construction insurance” is not itself a form of insurance, but merely refers to insurance that relates to construction projects.

Builder’s risk insurance is a type of property insurance that is often correlated with construction insurance. Builder’s risk insurance provides coverage for the property owner, the contractor, and potentially others with an interest in the project against risks of loss to the construction project. The purpose of builder’s risk insurance is to provide coverage for fortuitous loss occurring during construction. U.S. Fire Insurance Co. v. Sovran Construction Co., 854 So. 2d 221, 222 (Fla. Dist. Ct. App. 2003). Builder’s risk policies can cover not only physical damage, but also economic losses due to delays in completion. Terra-Adi International Dadeland, LLC v. Zurich American Insurance Co., 20 Fla. L. Weekly Fed. D 678 (U.S. S.D. Fla. 2007). Therefore, it is dependent on the policy as to what will be covered by insurance. Most basic builder’s risk policies cover damages caused by fire, weather, vandalism, or theft.

Commercial general liability insurance is another construction insurance that provides liability protection to businesses in the case of bodily harm or property damage during the course of business. This general liability usually covers faulty workmanship and job-related injuries.

There are also errors & omissions/ professional liability insurance (E&O). E&O is an insurance that protects an individual should a claim be made about an error or mistake made during business or an omission where a contractor failed to do something. For example, an engineer makes an error in their calculations, which causes a building to have structural problems, the owner of that building might sue the engineer, but the E&O policy might cover that claim.

Inland Marine Insurance is another type of construction insurance that can be beneficial to general contractors. While the name comes from an era when this insurance covered primarily ocean-bound materials and vessels, it is not the case today. Inland marine insurance usually covers property in transit and the equipment used by contractors and developers. This covers the cost of such items as forklifts, excavators, building materials and more.

Commercial auto insurance covers company-owned vehicles and equipment from damages from vehicle accidents, theft, and vandalism. This insurance is required in every state when the company purchases a vehicle for employee or owner use.

There are also other types of insurance for construction projects such as construction bonds. A construction bond is a type of surety bond that protects against disruptions or financial loss due to a contractor’s failure to complete a project. These bonds will ensure that construction project bills will get paid. These bonds provide great coverage because the construction industry is one of the most volatile industries. Our attorneys at RAK Law Firm have extensive experience in reading and litigating insurance policies and bonds. Insurance representatives don’t always have the claimant’s best interests in mind but the attorneys at RAK Law Firm do.